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Gti Final Report 5.4.11
Gti Final Report 5.4.11
TALENT INDEX
REPORT:
PREFACE
The Global Talent Index Report: The Outlook to 2015 was written by the Economist Intelligence Unit
and published by Heidrick & Struggles. The research undertaken for the study consisted of three
main initiatives:
UPDATING AND EXPANSION OF THE GLOBAL TALENT INDEX
Launched initially with 30 countries in 2007, the index has been expanded
to include 60 countries. It benchmarks the countries on their capacity
for developing, attracting and retaining talent, both in 2011 and projected
to 2015.
EXECUTION OF A GLOBAL SURVEY OF BUSINESS EXECUTIVES
To gauge corporate views on the talent outlook for businesses, 441
senior executives nearly half having human resource management
responsibilities were surveyed in late 2010 and early 2011.
IN-DEPTH INTERVIEWS
Discussions were held with senior human resources executives and experts
to obtain their insights on the most pressing talent challenges facing
businesses and countries. The following individuals were interviewed for
the study:
Danny Kalman
Global Talent Director,
Panasonic
KA Narayan
President of Human Resources,
Raymond Group (India)
Karl-Heinz Oehler
Vice-President,
Global Talent Management,
Hertz Corporation
Randall Schuler
Professor of International
Human Resource Management,
Rutgers University (US)
Martin Walker
Senior Director of the
Global Business Policy Council,
AT Kearney
01
EXECUTIVE SUMMARY
Judging by persistently high unemployment levels in
many countries, and growing pools of potential recruits
in the developing world, policymakers and business
leaders may be forgiven for viewing talent wars as
a relic of a pre-downturn idyll. Such views may be
misplaced: big demographic trends such as population
aging remain unchanged, and improving economic
performance in the major economies over the next few
years are likely to result in demand for talent again
outstripping supply. Moreover, even in developed
countries, there remain today serious shortages of
recruits with the critical soft skills companies
require most.
Key findings from the Global Talent Index (GTI) include the following:
THE US IS THE STELLAR GTI PERFORMER, RANKING FIRST IN 2011 AND 2015.
The US lead is almost one full point (on a 1-10 scale) in both years over the next best performers. The countrys
foremost strengths are the excellence of its universities, the high overall quality of its existing workforce and a
meritocratic environment that is relatively unencumbered by restrictive labor regulation.
NORDIC AND DEVELOPED ASIA PACIFIC COUNTRIES ARE ALSO PROMINENT IN THE GTI TOP TEN.
Denmark, Finland and Norway figure in the index top five in both 2011 and 2015, and Sweden joins them in the
latter year all thanks in part to their consistent and substantial investment in education from primary through
tertiary level. Australia and Singapore are other strong performers, the former due, among other factors, to its
high-quality universities and the latter to its openness to international trade and foreign direct investment.
CANADA, CHILE AND TURKEY ARE THE BIGGEST GAINERS BETWEEN 2011 AND 2015.
The rankings remain reasonably stable in both years, but noteworthy advances in 2015 are registered by Canada,
Chile and Turkey. Improved economic performance is expected to help talent environments improve in these
countries, while tough economic conditions contribute to the largest falls in the index in 2015, suffered by Greece
and Venezuela.
CHINA OUTPERFORMS OTHER COUNTRIES IN THE INDEX. China rises to 31st place in the GTI in 2015 from
33rd in 2011, but more notable is the five-point improvement in its score the largest increase in 2015 of any
country in the index. A major contributor is an expected increase in the countrys willingness to embrace foreign
workers. Brazil also registers considerable improvement between 2011 and 2015, with employment growing quickly,
expenditure on education rising and the language skills of the workforce improving.
02
The view from the boardroom and executive suite is likewise relatively positive when it comes
to companies abilities to attract the skilled people they will need in the coming years. But our
executive survey and interviews nevertheless reveal concerns that talent wars will be reignited.
The following are major findings from our research:
03
04
2011
RANK
COUNTRY
CHART 1: A
SCORE/
100
2011
RANK
United States
74.2
31
Chile
43.7
Denmark
64.7
32
Slovakia
43.3
Finland
63.2
33
China
41.1
Norway
61.9
34
Russia
40.8
Singapore
60.2
35
India
40.5
Australia
60.1
=36
Malaysia
40.1
Sweden
59.5
=36
Romania
40.1
Hong Kong
59.1
38
Mexico
39.7
Switzerland
58.5
39
Venezuela
39.4
=10
Israel
58.3
40
Colombia
39.1
=10
Netherlands
58.3
41
Saudi Arabia
39.0
12
United Kingdom
58.2
42
Brazil
38.2
13
Germany
57.9
43
Ukraine
38.0
14
Canada
57.8
44
Philippines
37.6
15
New Zealand
57.7
45
South Africa
37.4
16
Ireland
57.4
46
Thailand
36.8
17
Austria
55.7
47
Peru
36.4
18
Belgium
55.5
48
Turkey
35.0
19
France
55.1
49
Bulgaria
34.7
20
Taiwan
54.5
50
Ecuador
33.5
21
Spain
49.7
51
Egypt
32.8
22
South Korea
48.4
52
Vietnam
30.7
=23
Greece
46.7
53
Kazakhstan
30.5
=23
Italy
46.7
54
Azerbaijan
29.8
25
Czech Republic
45.9
55
Iran
29.7
26
Portugal
45.4
=56
Algeria
27.0
27
Japan
45.0
=56
Pakistan
27.0
28
Argentina
44.6
58
Indonesia
26.5
29
Poland
44.0
59
Sri Lanka
26.3
30
Hungary
43.8
60
Nigeria
23.1
COUNTRY
SCORE/
100
COUNTRY
SCORE/
100
2011-2015
CHANGE
2015
RANK
RANK
CHANGE
COUNTRY
SCORE/
100
2011-2015
CHANGE
--
United States
74.5
+0.3
31
+2
China
46.3
+5.2
--
Denmark
65.4
+0.7
32
-4
Argentina
46.2
+1.6
--
Finland
64.2
+1.0
33
-10
Greece
45.7
-1.0
+3
Sweden
63.4
+3.9
34
--
Russia
43.1
+2.3
-1
Norway
62.3
+0.4
=35
--
India
42.2
+1.7
=6
--
Australia
61.9
+1.8
=35
+3
Mexico
42.2
+2.5
=6
-1
Singapore
61.9
+1.7
37
-1
Romania
41.8
+1.7
+6
Canada
61.3
+3.5
38
+4
Brazil
41.7
+3.5
--
Switzerland
60.9
+2.4
=39
-3
Malaysia
41.1
+1.0
10
-2
Hong Kong
60.8
+1.7
=39
+2
Saudi Arabia
41.1
+2.1
=11
+2
Germany
59.9
+2.0
41
-1
Colombia
40.8
+1.7
=11
-1
Israel
59.9
+1.6
42
+1
Ukraine
40.3
+2.3
13
-3
Netherlands
59.4
+1.1
43
+5
Turkey
39.9
+4.9
14
-2
United Kingdom
59.3
+1.1
44
--
Philippines
39.8
+2.2
15
--
New Zealand
59.1
+1.4
45
+1
Thailand
39.0
+2.2
16
+3
France
58.1
+3.0
46
-1
South Africa
38.7
+1.3
17
-1
Ireland
58.0
+0.6
47
--
Peru
37.8
+1.4
18
--
Belgium
57.2
+1.7
=48
+1
Bulgaria
37.3
+2.6
19
+1
Taiwan
54.3
-0.2
=48
+3
Egypt
37.3
+4.5
20
-3
Austria
53.5
-2.2
50
--
Ecuador
36.7
+3.2
21
+1
South Korea
51.6
+3.2
51
-12
Venezuela
36.0
-3.4
22
-1
Spain
49.5
-0.2
52
+1
Kazakhstan
33.2
+2.7
23
--
Italy
48.1
+1.4
53
-1
Vietnam
32.7
+2.0
24
+3
Japan
48.0
+3.0
54
+2
Pakistan
30.8
+3.8
25
--
Czech Republic
47.6
+1.7
55
--
Iran
30.3
+0.6
=26
+5
Chile
47.1
+3.4
56
+2
Indonesia
30.2
+3.7
=26
--
Portugal
47.1
+1.7
57
+2
Sri Lanka
29.2
+2.9
28
+1
Poland
46.7
+2.7
58
-2
Algeria
28.0
+1.0
29
+3
Slovakia
46.6
+3.3
59
+1
Nigeria
27.7
+4.6
30
--
Hungary
46.5
+2.7
60
-6
Azerbaijan
26.3
-3.5
2015
RANK
CHART 1: B
05
INTRODUCTION
As recently as three years ago, it was commonly assumed that companies based in the
developed world faced a large and widening gap between their hiring needs and the pools of
suitable talent available to them. The retirement of baby boomers and other population issues,
business leaders and policymakers expected, would continue to remove talented employees
from the workforce faster than they could be replaced. Building talent pools in developing
markets appeared one of the few potential solutions having large enough scale to plug the gaps.
The recession
The recessions of 2009-10 have seemingly turned this
situation on its head as, in established markets at
least, the supply of skilled labor now outstrips demand.
From a longer term perspective, however, how much
has really changed? The same big demographic trends
visible before the downturn remain entrenchednamely
population ageing and declining birthrates (also
increasingly visible now in some emerging markets).
Firms in the developed world still complain about a
shortage of critical business and analytical skills even
amidst larger pools of available recruits. And the need
to tap emerging-market talent is perceived to be if
anything even more acute now as Western companies
focus their hopes for future growth on meeting demand
in those markets.
Last but not least, it may be assumed that the current
surplus of available talent in the West will diminish or
even disappear once the developed economies enter
a slightly more robust period of growth, as is expected
beginning in 2012-13 (and evident now in the likes of
Germany and the US).
In this context, it may be said that the downturn has
merely brought a truce in the talent wars, and that
theyre likely to flare up again in the foreseeable future.
Improving how they educate, attract, train and retain
talent ought therefore to remain top of the agenda for
countries and businesses alike as they seek to establish
long-term competitiveness.
06
Country benchmarking
It is often difficult when building country benchmarking
models to capture the street, or the micro-level
challenges faced by businesses and other organizations.
To help bridge that gap, the Economist Intelligence
Unit has also conducted a global survey of over 400
senior executives (half of whom are human resource
managers) to gauge their views on the talent challenges
their organizations expect to face over the coming
years. The results of that analysis, enriched by insights
from in-depth interviews conducted with senior talent
managers and experts, are discussed in the subsequent
section.
2011 RANK
COUNTRY
SCORE/100
United States
74.2
Denmark
64.7
Finland
63.2
Norway
61.9
Singapore
60.2
Australia
60.1
Sweden
59.5
Hong Kong
59.1
Switzerland
58.5
=10
Israel
58.3
=10
Netherlands
58.3
2015 RANK
COUNTRY
SCORE/100
United States
74.5
Denmark
65.4
Finland
64.2
Sweden
63.4
Norway
62.3
=6
Australia
61.9
=6
Singapore
61.9
Canada
61.3
Switzerland
60.9
10
Hong Kong
60.8
07
Looking Ahead
Comparing the rankings of 2011 and 2015, the top ten remain relatively stable. However, one
country Canada bursts into eighth position in 2015, rising by six places, the largest jump
in the index. This improvement is propelled by the demographic growth rate of its working
population, together with a prospective surge in employment and a marked improvement in
technical skills, both resulting largely from the boom in the countrys oil industry.
In the next tier down, the UK and Netherlands fall by
two and three places respectively, while Germany and
France rise by those same margins. The Economist
Intelligence Unit expects all four countries to undergo
a decline in compulsory education standards, so why
the discrepancy in their results? First, substantial
employment growth is expected in France and,
especially, in Germany. Second, both of the latter will
see a relaxation of labor laws, and Germany an easing
of burdensome wage regulation developments that
will help the talent market to adapt more quickly to
structural and cyclical changes in the economy.
Bleak employment prospects in Greece and Venezuela
contribute to a predictably sharp descent in both these
countries in 2015, whereas the reverse is true in Chile
and particularly in Turkey, where strong economic
growth is projected over the coming years.
In Rank
In Score
TOP 3 RISERS
TOP 3 FALLERS
Canada +6
Azerbaijan -6
Chile
+5
Greece
-10
Turkey
+5
Venezuela
-12
China
+5.2
Austria
-2.2
Turkey
+4.9
Venezuela
-3.4
Nigeria +4.6
08
Azerbaijan -3.5
Regional disparities
The size of the potential pool of able workers is of course important, but what matters more
for the purposes of the index is whether this potential can be nurtured effectively, and
whether conditions promote and safeguard economic opportunities for individuals.
2015
31st
45
33rd
34th
40
34th
35th
35th
38th
42nd
35
30
25
20
15
10
5
0
China
Russia
India
2011
50
Brazil
OVERALL RANK
2011
2015
2011
2015
CHANGE
North America
66.0
67.9
+1.9
Western Europe
55.9
57.0
+1.1
All countries
45.1
47.0
+1.9
Asia
43.2
45.5
+2.3
Latin America
39.3
41.1
+1.8
39.1
41.0
+1.9
Middle East
37.0
39.4
+2.4
Africa
30.3
33.2
+2.9
09
Score/100
71%
Total
73%
68%
Asia Pacific
North America
72%
Europe
74%
Rest of World
10
39%
37%
31%
27%
Total
Asia Pacific
North America
28%
Europe
Rest of World
CHART 8: OVERALL, HAS THE AMOUNT OF TIME AND/OR INVESTMENT REQUIRED TO BRING NEW
MANAGEMENT AND/OR SPECIALISED WORKERS UP TO SPEED OVER THE PAST TWO YEARS RISEN OR FALLEN?
Fallen somewhat, 8%
Fallen substantially, 2%
11
48%
Provide access to
top management
42%
41%
39%
37%
13
CHART 10: IN GENERAL, WHAT ARE THE PRIMARY SHORTCOMINGS OF MANAGEMENT-LEVEL HIRES AND/OR OTHER
SPECIALISED WORKERS IN THIS MARKET, WHEN COMPARED WITH THE REST OF YOUR WORKFORCE GLOBALLY?
(TOP RESPONSES)
60%
50%
Limited creativity in
overcoming challenges
40%
20%
0%
30%
10%
Asia Pacific
The concern with a lack of creativity is particularly
acute in Asia and Latin America, indicating a feeling
that workers in these regions, in particular, are
conditioned to think in straight lines, and are less able
to adapt to changing circumstances.
As far as China is concerned, Professor Schuler believes
that the effect of the regimes infamous one-child policy
on workplace behavior should not be underestimated.
Young people in China are used to being the center
of the world, and may find it difficult to adjust when
things arent going their way, with the result that they
are perhaps not as flexible as their companies would
want.
Limited experience in a multinational organization is
another major perceived weakness in potential recruits,
particularly in the developing world. Two factors may
be at play here. First, as already discussed, candidates
with the broad-based, international training that
multinationals can provide are attractive to a wide
range of companies.
14
North America
Europe
Rest of world
Another cause for corporate concern revealed by the survey has to do with the shortage of
soft skills in the armory of many new hires. When asked about the primary shortcomings
of their management-level recruits, limited creativity in overcoming challenges tops the
list. The rarest personality traits throughout the world, says Mr Oehler, are resilience,
adaptability, intellectual agility, versatility in other words, the ability to deal with a changing
situation and not get paralyzed by it.
15
Index components
The GTI is in essence a collection of data indicators that have been grouped into thematic
categories. The index categories are as follows:
Demographics
Talent environment
Compulsory education
Openness
University education
Proclivity to attracting
talent
16
17
Qualitative data
All qualitative indicators have been scored on an integer scale and have been assigned by
our country experts. This scale ranges from 0-4 or 1-5; scores are assigned by the research
managers and the Economist Intelligence Units team of country analysts according to the
scoring criteria. The integer scores are then transformed to a 0-100 score to make them
comparable with the quantitative indicators in the index.
11.1%
Talent environment
11.1%
Compulsory education
11.1%
Openness
11.1%
University education
22.2%
11.1%
22.2%
18
Source
DEMOGRAPHICS
COMPULSORY EDUCATION
UNESCO
EIU Market Indicators and Forecasts (MIF)
UNESCO
EIU Market Indicators and Forecasts (MIF)
UNESCO; EIU Market Indicators and Forecasts (MIF)
World Bank WDI; CIA World Factbook
UNESCO; OECD
UNESCO; OECD
UNIVERSITY EDUCATION
UNESCO
QS
UNESCO; EIU estimates
TALENT ENVIRONMENT
R&D as % of GDP
Degree of restrictiveness of labor laws
Wage regulation
Protection of intellectual property
Protection of private property
Meritocratic remuneration
EIU
EIU
EIU
EIU
EIU
EIU
OPENNESS
19
20
2015 INDEX
21
33 %
49 %
10 %
7%
1%
How confident is your business that it will be able to attract and retain the necessary labor
needed for its management team and/or other specialised workers to achieve its growth targets
for the coming two years?
Highly confident
Somewhat confident
Neutral
Somewhat pessimistic
Highly pessimistic
Not applicable
24 %
47 %
14 %
13 %
1%
1%
How satisfied has your firm been with the quality of new hires for your management team and/or
other specialised workers over the past two years?
Highly satisfied
Somewhat satisfied
Neutral
Somewhat unsatisfied
Highly unsatisfied
Not applicable
21 %
44 %
17 %
13 %
2%
3%
If you have been generally satisfied with the quality of new hires for your management team and/or
other specialised workers, why do you believe that is? Select all that apply.
Our brand helps ensure that strong candidates apply
Our pay/benefits package helps ensure that strong candidates apply
Quality of tertiary and/or management education in this country is generally high
Quality of primary and secondary education in this country is generally high
There is a significant pool of experienced managers and/or specialised workers in this country.
Our company has a detailed process or programme for integrating new hires
Government policy regarding immigration and/or free movement of labor helps ensure that top
candidates are available to meet demand
Other
22
53
42
39
37
36
24
%
%
%
%
%
%
8%
9%
If you have been unsatisfied with the quality of new hires for your management team and/or
other specialised workers, why do you believe that is? Select all that apply.
There is a limited pool of experienced managers and/or specialised workers in this country.
Our pay/benefits package is not good enough to attract sufficiently strong candidates
Our brand is not good enough to attract sufficiently strong candidates
Quality of tertiary and/or management education in this country is generally low
Our company has a limited process or programme for integrating new hires
Quality of primary and secondary education in this country is generally low
Government policy regarding immigration and/or free movement of labor hinders the ability of
good candidates to meet demand
Other
43
38
35
31
25
18
%
%
%
%
%
%
12 %
12 %
In general, what are the primary shortcomings of management-level hires and/or other specialised
workers in this market, when compared with the rest of your workforce globally? Select up to three.
Limited creativity in overcoming challenges
Limited experience within a multinational organization
Limited work experience
Culture-related issues
Limited loyalty to firm and/or brand
Language-related issues
Difficulties in integrating with the rest of the workforce
Limited formal qualifications
Other
41 %
37 %
35 %
27 %
25 %
22 %
20 %
15 %
9%
How much time and/or resource does your firm need to invest in training and developing new
management and/or other specialised workers before theyre able to do the necessary job, in
comparison with the norm for your organization globally?
Well above average time and/or resource required
Above average time and/or resource required
Average time and/or resource required
Below average time and/or resource required
Well below average time and/or resource required
Dont know/ not applicable
13 %
28 %
40 %
9%
3%
7%
Overall, has the amount of time and/or investment required to bring new management and/or
specialised workers up to speed over the past two years risen or fallen?
Risen substantially
Risen somewhat
Stayed the same
Fallen somewhat
Fallen substantially
Dont know/ not applicable
10 %
39 %
36 %
8%
2%
4%
23
Which of the following benefits does your firm currently use to attract and retain management
and/or specialised workers? Select all that apply.
Offer local training and development
Provide access to top management
Give clear autonomy/decision-making powers
Provide strong career opportunities
Provide higher salaries
Provide better benefits (eg, housing allowances, car)
Offer international training and development
Promote the benefits of association with your brand
Provide a dedicated mentor and/or other form of support to integrate people properly
Other
48 %
42 %
41 %
39 %
37 %
33 %
31 %
24 %
23 %
6%
Considering your own personal experience within your company, how well do believe your company
currently performs, in terms of its overall performance with regards to attracting workers?
Excellent
Above average
Average
Below average
Poor
10 %
44 %
35 %
10 %
2%
Considering your own personal experience within your company, how well do believe your company
currently performs, in terms of its overall performance with regards to retaining workers?
Excellent
Above average
Average
Below average
Poor
12 %
41 %
34 %
10 %
3%
Considering your own personal experience within your company, how well do believe your company
currently performs, in terms of its overall performance with regards to developing workers?
Excellent
Above average
Average
Below average
Poor
11 %
36 %
33 %
15 %
5%
24
18 %
14 %
10 %
8%
7%
6%
6%
5%
5%
4%
3%
3%
3%
2%
2%
2%
1%
1%
1%
49 %
12 %
16 %
6%
17 %
5%
25 %
7%
4%
7%
20 %
5%
12 %
10 %
4%
25
47 %
46 %
32 %
20 %
16 %
15 %
9%
8%
7%
5%
4%
4%
3%
2%
4%
30 %
29 %
25 %
6%
5%
5%
26